Amazon ties up with Vodafone to acquire hesitant customers

The e-tailer has tied up with Vodafone India, to provide a touch-and-feel experience of smartphones like One-Plus 3, which sell exclusively on the platform.Madhav Chanchani | ET Bureau | Updated: June 20, 2016, 08:38 IST

Amazon India is expanding its offline presence in the country as it looks to further localise its offering and bring on board customers who are still reluctant to shop online.

The e-tailer has tied up with Vodafone India, the country's second largest telecom operator by customers, to provide touch and feel experience of smartphones like OnePlus 3, which sell exclusively on the platform.

Amazon India and Vodafone have started pilots of this service in Bengaluru, across 40 stores owned by the telco.

The tie up with Vodafone follows expansion of Amazon's assisted shopping programme, called Udaan, to over 1,000 outlets in tier II & III cities across the country.

While Vodafone declined to comment to an emailed query, an Amazon India spokesperson confirmed the development.

As part of the tie up, each Vodafone store now has a display case with mobile phones listed on Amazon and a product specialist trained by the e-tailer. Customers can try out phones, especially as several smartphones are now exclusively launched and sold on Amazon India without any offline presence. Customers can order the product online from the store, and also come back to it for any post-purchase help.

While still in a pilot stage, the project is likely to be rolled out across the country. There are about 10,000 Vodafone Stores of different sizes across India, giving Amazon access to a wide network.

Besides expanding its offline presence, the move will also strengthen Amazon's presence in the key smartphone space where it has been catching up on rival Flipkart, snagging exclusive tie ups with Lenovo K4 Note, Redmi Note 3, OnePlus, Coolpad range and Moto G4 Plus. Smartphones, which are part of the consumer electronics category, form the largest share of gross merchandise value for online retailers in India.

According to Amazon, the idea behind this pilot is to acquire customers who are still "hesitant to shop online".

"With an aim to acquire incremental set of customers who are not yet shopping online, we are focusing on providing them with opportunities to experience the benefits of shopping on Amazon.in and build trust in the brand," Arun Srinivasan, category leader of consumer electronics at Amazon India, said in an emailed statement.

Flipkart also opened 20 experience stores across technology parks in the country last year, where customers can pick up their orders besides getting a touch and feel of products selling on the online marketplace.

No instant gratification, lack of touch and feel, long delivery time and trust issues are the top adoption barriers for customers who are still not buying online, according to a study by Google and AT Kearney. If these barriers are overcome, number of online shoppers is expected to increase from 50 million now to 175 million by 2020.

Players who are building out an omnichannel strategy like Zopper have also started seeing traction over the last year, as they tackle instant gratification and trust issues.

"Expectation in offline stores is typically instant gratification, but I think Amazon is realising that in India, all customers are not converting to online shopping and problem is possibly touch and feel of the product," said Neeraj Jain, CEO of electronics hyperlocal shopping app Zopper, which fulfills orders by tying up with neighborhood merchants.

Zopper has seen number of monthly orders increase by 10 times in the last year to 35,000, with annual gross merchandise value crossing $100 million.